Windows Mobile use has plunged in the last year, while Apple's OS X-driven iPhone and RIM's Blackberries have both posted impressive growth.

Microsoft's sales have plunged while competitors Apple and RIM have flourished

Smartphones only recently have risen to
sales prominence over more crude cell phone models. The shift
has come largely thanks to more powerful and energy efficient mobile
processors, putting unprecedented media, internet, and communications
devices in the hands of users. A year ago, Microsoft looked
comfortable in that market, coming off another year of growth and
holding a promising 11 percent global marketshare, almost tied with
Apple's 12.9 percent and just behind Research in Motion's 16
percent.

The picture became increasingly dismal for Microsoft
over the course of 2009, though. According to market research
firm Gartner, Windows Mobile's marketshare now stands
at 7.9 percent. Apparently its competitors ate its lunch as
Apple's (OS X) share rose to 17.1 percent and RIM also grew
significantly, now at 20.8 percent.

That's disappointing
considering that Microsoft was one of the first players to enter the
market with its Windows CE, released in 1996, which went on to form
the foundation Windows Mobile. One of the main problems has
been the iPhone, which launched in the summer of 2007 and has since
seen two compelling hardware updates, the first bumping it up to 3G
and the second delivering a faster processor. States Ross
Rubin, an NPD Group consumer technology analyst, "It was really
the iPhone that came out full-bore for a consumer perspective.
We saw app development focus on consumer applications like social
networking and games.... Particularly with Apple's retail presence
and advantages in that market, through design and so forth, that's
where Microsoft's main challenge lies."

Raven Zachary, a
technology analyst and owner of iPhone app development house Small
Society comments on Microsoft's missed opportunity in the smartphone
market, "It was theirs to lose and they lost it. They had
everything they needed to execute, to do the right kinds of carrier
deals to create an app store, create visual voice mail, touchscreens
and so on. They've been in this space since the beginning."

One
problem has been the segmented hardware. RIM doesn't overly
rely on media to sell; rather it sells itself with a strong suite of
proprietary business tools. Apple, meanwhile has a single basic
hardware design (with some variations between its three generations)
allowing an App to easily work on any of its phones. Windows
Mobile phones, however, include handsets from HTC, LG, Samsung, and
others -- in other words developers have to deal with the headache of
creating multiple versions of a single app to reach the entire
audience. At least Microsoft is not alone in this plight --
segmentation has also become an emerging problem for Google's Android
OS.

Another problem has been the slow pace of updates.
With the launch of Windows 7, many heard that Windows Mobile 7 was
soon forthcoming. However, Microsoft instead released
Windows Mobile 6.5, a stopgap solution. Windows Mobile 7,
codenamed "Photon", has been bumped back to 2010.
That delay has caused many buyers to simply not upgrade -- or more
likely, pick a Blackberry or iPhone instead.

Microsoft isn't
out of the game just yet. Just as Apple looked to be on its way
out of the PC market, but managed a turnaround, Microsoft still can
hope to right the ship and dig out a nice niche of marketshare for
itself. Forthcoming proprietary
phones may play an important role in that. However, the
trouble signs remain for Microsoft and if doesn't take strong action,
it risks losing OS war for good -- in the smartphone market.

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This article is over a month old, voting and posting comments is disabled

Stuck with them from 2006 through 2009. I really wanted it to get better, but I waited two years more than I really should have.

This really shows you what happens when you sit around in this market, you potentially lose customers forever. Microsoft should have put a LOT more resources into their mobile division, even at the expense of their core operating system, because mobile OS's are far more likely to be the future than clunky desktop OS's.

I think Google and Apple are really positioned well here.

"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer